RBI’s MDR Framework for Large-Value UPI Transactions

• 16 Sep 2026

On 15th September 2026, RBI said introducing MDR on large-value UPI transactions will support digital payments sustainability.

Key Points

• User Charges: All UPI transactions, including P2P and P2M payments, remain free for users.
• Merchant Threshold: P2M transactions below ₹2,000 remain free for merchants.
• MDR Rate: A nominal MDR of 0.4% applies to specified P2M transactions above ₹2,000.
• MDR Cap: Transactions of ₹75,000 and above have MDR capped at ₹300.
• Essential Sectors: Railways, telecom, insurance, fuel and agricultural inputs attract ₹5 MDR above ₹2,000.
• MDR Distribution: Banks, payment service providers and UPI application providers receive the MDR.
• Purpose of MDR: Revenue distribution can support technology, infrastructure and payment acceptance networks.
• Government Clarification: MDR is a private-sector payment processing cost; it is neither a government tax nor a charge collected by NPCI.